Longmont City Council Gives Initial Approval to Deferring Some Residential Construction Impact Fees

March 6, 2019
Construction continues Tuesday on apartments at South Main Station. Longmont City Council on Tuesday gave initial approval to an ordinance that would delay collection of some impact fees on new residential construction.

Longmont is poised to postpone the point at which it collects some of the development impact fees it charges builders for new residential construction projects.

Currently, those impact fees have to be paid when the city issues a building permit for construction of the residence.

City council on Tuesday unanimously approved an ordinance that would implement a fee deferral program for some of those charges, giving builders the option of paying them at a later point. That could come at the time construction has been completed and passed inspections and the point where the builder or developer seeks the city certificate of occupancy that must be issued before people can move into and live in new homes.

The deferral option would be available to all new residential construction, including single-family homes, duplexes, triplexes and multi-family projects.

Longmont Planning and Development Services staff in February told council the intent of such a fee deferral program is typically to allow builders flexibility in paying fees at alternate times in the construction process rather than requiring full payment when a building permit is issued.

Under the ordinance, Longmont would continue to collect some fees at the time building permits are issued, including plan-review fees and inspection fees related to construction, such as an electrical permit fee, an electrical connection fee, a plumbing permit fee, a mechanical permit fee and a sewer inspection fee.

Fees whose collection could be deferred include water and sewer system development fees; an electric community investment fee; a park improvement fee; a recreation buildings impact fee; a transportation impact fee; a solid waste and recycling containers fee; a storm drainage system capital improvement fee, and a Windy Gap water supply system surcharge.

Those potentially postponable fees account for more than 60 percent of the fees Longmont collects from builders of new residences, according to city staff.

However, city service deliveries supported by those impact fees begin at the time the home is occupied, rather than during construction.

“To put the permit costs into perspective, a 2,400-square-foot single-family home with a valuation of $359,949 on a 6,700-square-foot lot would pay a total permit fee of $34,686,” staff said in February.

“Of that permit fee, $23,500 are impact fees that could be moved or paid at the time of certificate of occupancy. All other fees would continue to be collected at time of (building) permit issuance.”

Even if some fees are deferred, a certificate of occupancy would not be issued until all fees are paid in full.

The idea of deferring some impact fees arose during an August work session city council held with representatives of the development community during discussions of an affordable-housing mandate for new residential development projects — a mandate council adopted in December.

The potential fee deferral program staff presented for council discussion on Tuesday would apply to all new residential construction, and not just units considered under the city code to be housing affordable to low- and middle-income residents.

The ordinance now will be scheduled for a public hearing and possible final council vote on March 19.

John Fryar: 303-684-5211, jfryar@times-call.com or twitter.com/jfryartc